TaxTMI 
TaxTMI 
2016 (9) TMI 753
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..... Aggrieved by the order of the Assessing Officer (AO), assessee carried the matter before the ld.CIT(A), who vide order dated 30/11/2010 (in Appeal No. CIT(A)-XVI/JCT, Range-3/407/09-10) dismissed the appeal of the assessee. Aggrieved by the order of ld.CIT(A), assessee is now in appeal before us and has raised the following grounds:- 1.1. The order passed u/s.250 on 30.11.2010 for AY 2007-08 by CIT(A)-XVI, Abad, upholding the additions made in the order u/s.143(3) dated 21.12.2009 passed by AO is wholly illegal, unlawful and against the principles of natural justice. 1.2. The Ld.CIT(A) has grievously erred in law and or on facts in upholding the additions/disallowance made by AO without considering fully and properly the evidence produced and submission made. The ld.CIT(A) ought to have admitted the additional evidence produced by the appellant 2.1. The Ld.CIT(A) has grievously erred in law and or on facts in upholding that the entire unutilized balances of various taxes aggregating to Rs. 20,03,604 was required to be included in the valuation of cl.stock u/s.145A(b) of the Act. 2.2 That in the facts and circumstances of the case and in law, th....
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.... change to the net profit. The submission of the assessee was not found acceptable to the AO. He thereafter added Rs. 20,03,604/- (representing the balance of excise, VAT, etc.) as part of the closing stock and accordingly made the addition. Aggrieved by the order of AO, assessee carried the matter before the ld.CIT(A) who upheld the order of the AO by observing as under:- "2.3.3. From the above, it is clear that even if the assessee follows exclusive method of accounting, still it has to give effect to the adjustments as per section 145A. As stated above, the appellant is required to add the taxes, duties, etc. to both opening and closing stock as well as in the purchases and sales. However, in the first year the opening stock cannot be changed from the closing stock of the earlier year as per the basic accounting principle and as discussed by the Hon'ble ITAT in the case of West Coast Paper Mills Ltd. (supra). This principle has been upheld by the Hon'ble ITAT, Ahmedabad also in the case of J.K. Paper Ltd. (supra). 2.3.4 In view of the above, it is clear that the requirement of Section 145A is that the assessee must include tax duties, cess, etc. for valuing the....
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....y to pay tax on such unavailed MODVAT credit. We further find that on identical facts, the Coordinate Bench of Tribunal in the case of Shri Paragbhai Ramanlal Patel (supra) has decided the issue in favour of assessee observing as under:- "8. We have heard the rival submission and perused the material on record. We find that ld.CIT(A) after relying on the decision cited in the order has held that Assessee must show the effect of section 145A by following the inclusive method i.e. by including all taxes, dues, cess etc. in the closing stock. He has further held that excise duty which is added to the closing stock has to be allowed u/s.43B of the Act on payment basis. Before us, Revenue has not brought any material on record to controvert the findings of Ld.CIT(A) nor has brought any contrary binding decision in its support. We therefore find no reason to interfere with the order of Ld.CIT(A). Thus this ground of Revenue is dismissed." 5.1. Further, before us, Revenue has not brought any contrary binding decision in its support. In view of the aforesaid facts and following the decisions cited hereinabove, we are of the view that no addition can be made in the present case ....
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....e AO in para-5.2 on page 8 and nine of the assessment order. The AO stated that the assessee was requested to submit the details or evidence to prove the genuineness of payment of commission. The assessee has failed to give nature and proof of services rendered by such persons. The assessee has given only details of payment and TDS deducted which by itself does not prove the commission payment. The AO thereafter relied on several decisions of Supreme Court and other high courts to say that payment and deduction of TDS and even existence of an agreement by itself do not justify the payment of commission unless the assessee to services rendered. The AO therefore disallowed the commission payment. 3.2 During the appellate proceedings, the appellant repeated the submission made before the AO and stated that the AO had not intimated the remarks or deficiencies pointed out by the AO in the assessment order regarding various agreements. The appellant stated that the credit notes are issued by the assessee and hence they do not require signature of the other party. The appellant stated that it had given a chart showing the details of sales commission and the relevant evidence were....
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....ls in the managing agency agreement which authorised the managing agents to do certain acts could not be a substitute for evidence that those acts were done by the managing agents. Further, the Hon. Supreme Court in the case of Lachminarayan Madanalal [86 ITR 439], has stated that mere existence of an agreement between the assessee and its selling agents or payment of certain amounts as commission, assuming there was such payment, does not bind the Income-tax Officer to hold that the payment was not made exclusively and wholly for the purpose of the assessee's business. Although there might be such an agreement in existence and the payments might have been made, it is still open to the Income-tax Officer to consider the relevant facts and determine for himself whether the commission said to have been paid, to the selling agents or any part thereof is properly deductible under section 37 of the Act. Swadeshi Cotton Mills Co. Ltd. v. Commissioner of Income-tax [1967] 63 I.T.R. 57 (S.C.) followed. In view of the above, since the appellant has failed to prove the services rendered by giving documentary evidences. The disallowance made by the AO is confirmed and this ground of appea....